How Effective is YOUR Condo Board

November 2014

Condo owners have a responsibility to help manage their assets. That means volunteering to serve on the board or committees.

Boards of Directors for condo corporations are responsible for managing multimillion dollar annual budgets. They make decisions on how to best utilize the reserve fund and communicate with owners of the corporation.

While assistance may be provided by a Condominium Manager employed by the corporation, it should not be assumed that the Condominium Manager is suitably qualified for these tasks. The board retains ultimate responsibility for managing the Condominium Manager and, as such, should be capable of providing leadership and guidance to the individual in this role.

A condo board requires individuals with appropriate expertise, and owners who will vote such individuals into a position of responsibility. On far too many occasions one or both of these requirements is lacking.

Condo owners have a responsibility to help manage their assets. That means volunteering to serve on the board or committees. It also means voting individuals onto the board by virtue of their skills rather than friendship or other reasons.

The Ontario Residents’ Panel to Review the Condominium Act partially explains this problem in their January 2013 Final Report. “Some condominium boards struggle to fill their positions with qualified volunteers. Uninvolved owners mean certain annual general meetings fail to meet quorum. Some boards of directors have become swamped by conflicting owner requests, and owners sometimes find boards unresponsive to their concerns or overly forceful in their enforcement of by-laws. Certain disputes go unresolved or are only solved at exorbitant cost. Some condominium managers have taken advantage of unsuspecting clients. And certain condominiums have been hit by not just one but several of these challenges at once.”

“Some condominium boards struggle to fill their positions with qualified volunteers.”

The solution to this problem is not one which can be legislated. Condo boards, which are generally honest, do their best. Making poor decisions about the best use of funds is not a crime. Nor is an inability to make decisions, understand the desires and wishes of condo owners, or allowing condo amenities to deteriorate or be underutilized. Poor decisions can be a waste of money and result in a reduced standard of living.

Effective condo boards have good financial skills, and understand how to manage limited financial resources to best serve the interests of their condo community. They can effectively communicate with condo residents. Effective condo boards understand that committees extend the capabilities of the board. Committees provide expertise, can manage projects and also gather information so as to make better decisions.

When Boards operate without sufficiently skilled individuals there is a cost to the entire condo community. A condo board may choose to place too much reliance on their management company or condo manager thereby replacing a lack of skills with trust. That is, trust that their vendor possess the required combination of integrity, knowledge, skills and expertise.

Employing consultants to advise on specific matters is an accepted way to obtain needed expertise. Yet this expertise is specific and unrelated to general condo management. Given the vast amount of money spent by condo boards each year such advice could be extremely beneficial. There is vast expertise in the form of retired business executives who may be prepared to assist a condo in return for nominal remuneration. Employing such individuals on a limited basis could assist boards in establishing committees, evaluating options, project management and working with vendors which have a vested interest in charging as much as possible for as little as possible.

Thank you to CondoMadness for their assistance with this article.